An Analysis of Outsourcing Strategies and Risks

The assignment is a detailed analysis of outsourcing strategies and risks, focusing on offshoring and international outsourcing. It includes a questionnaire with 12 questions that cover various topics such as the present strategy used by Marks and Spencer, benefits and risks associated with outsourcing, and management of offshore teams. The assignment also provides references to articles and research papers related to outsourcing and offshoring.

Research Project

TABLE OF CONTENTS
TASK 2............................................................................................................................................3
Introduction............................................................................................................................3
Literature review....................................................................................................................3
Research Methodology..........................................................................................................5
Data analysis and interpretation.............................................................................................7
Research outcomes...............................................................................................................14
Reflection and recommendations for alternative research methodology.............................15
REFERENCES................................................................................................................................1

Research Topic : The benefit and risk of offshoring and outsourcing business in context of
globalization : A case study of Marks and Spencer.
TASK 2
Introduction
In present scenario, outsourcing is considered to be as one of the most powerful trends in
context of modern management. Offshoring can be defined as the activity of taking the function
out of nation. It is basically a type of outsourcing. The key drivers of offshoring are quality
improvement and cost reduction. Offshore outsource can be referred to as practice of hiring the
other companies to perform business functions. International outsourcing is a business practice in
which an organization hires international firm to conduct business activity for them. Strategic
outsourcing assist management to concentrate on core business function and long term growth.
Outsourcing helps an organization in exploring as well as capturing opportunities for innovation.
It provides firm an ease in smooth running of business. The major difference between two is that
offshoring is basically practice of getting the work done in different country. Whereas
outsourcing refers to the contracting of work by third party.
The research report will have focus on explaining the concept of outsourcing and
offshoring in context of international business. Study will emphasize on identifying the benefits
and disadvantages of offshoring as well as outsourcing in context of marks and Spencer.
Literature review
Concept of offshoring and outsourcing in international businesses.
According to the view of Caratti, Pinto, Scully and Perrin,(2018), outsourcing can be
considered to be as a particular type of international trade. The author Koch and Jørgensen,
(2018), argues that outsourcing is basically a purchase of products or services from outside
sources or international market. In simple words, author wants to state that an organization
purchases raw material or input from other companies located in different nation. As per the
thinking of Lioliou and Willcocks,( 2019), outsourcing can be defined as the transferring of
business functions from internal staff to outsider that is contractors. According to the perception

of Adams, Nyuur, Chima and Debrah, (2018), outsourcing can be considered to be as practice
utilized by firm for reducing costs by transferring work to outside suppliers.
According to the view of Munjal, Requejo and Kundu, (2018), offshoring is basically a
moving of different business operations to other nation for the following reasons such as cost
reduction. The author argues that, Offshoring can be considered to be as firm getting their
various services handled or managed by other organization in different nation. As per the opinion
of (), offshoring can be defined as obtaining of raw material as well as services strictly from the
business entities based in another country. According to the view of Koch and Jørgensen,
(2018), Offshoring is the most cost effective way of marking international presence.
The benefit of offshoring and outsourcing
As per the thinking of Koch and Jørgensen, (2018), cost effective services is the major
benefit of outsourcing the business activities. The author argues that Access to specialised skills
which are required for performing specific business function is the major advantage of
outsourcing. According to the perception of Kaur, Singh and Majumdar,(2018), Outsourcing
provides firm a flexibility for scaling up their business according to the requirement. The author
() argues that by outsourcing the business activity an enterprise can concentrate on competition
as well as core business function which is very much crucial in order to sustain in global
environment. As per the view of Kaur,(2018), outsourcing helps in increasing working
efficiency.
According to the thinking of Adams, Nyuur, Chima and Debrah,(2018), Reduction in the
cost of production could be the major benefit of offshoring. The author argues Munjal, Requejo
and Kundu, (2018), that an organisation can get tax advantage by offshoring the business
activities. As per the perception of Carmel, (2019), offshoring helps in financial saving. The
author also states that offshoring aid business entity in lowering or minimising the financial risk.
Risk involved in outsourcing and offshoring within businesses.
According to the thinking of Lioliou and Willcocks, (2019), loss of control is the major
risk associated with international outsourcing. The author Fountain and Langar,(2018), argues
that reliability and security are the biggest risk associated with outsourcing business activity to
internal companies. As per the opinion of Kaur, Singh and Majumdar (2018), Lack of an
effective as well as adequate communication can lead to the project failure which can have

negative effect on firm performance. The author Pla-Barber, Linares and Ghauri, (2018) argues
that Any arrangement with suppliers has elements of risk involved with it; however, risks
associated with sourcing internationally are often higher. According to the perception of Caratti,
Pinto, Scull and Perrin, (2018), increase in transaction cost can be the major risk associated with
offshoring of business activities. As per the research conducted by author Fountain and Langar,
(2018), breach of the security is the major threat associated with outsourcing business activities
to global companies.
Effective recommendations for entering into global market
According to the view of Johansson and Olhager, (2018), an organisation instead of
offshoring the business activity can enter into the joint venture with global company , as this is
the best and less risky strategy foe marking international presence. The author Koch and
Jørgensen, (2018) argues that an organisation can form strategic alliance with global companies
as this will help them in gaining the competitive advantage in the international market. This
strategy will also aid firm in reducing the risk of business failure.
Research Methodology
Research Methodology is basically strategies, approaches and philosophies used by
research for conducting the investigation process. It is very much essential for scholar to select
an appropriate research methodology, as this factor has direct as well as significant influence on
the outcomes. The different research methods used by the investigator in present study are :
Research type: The choice of research to be conducted is totally dependent on the nature of the
study. Qualitative and quantitative are basically two types of research which are generally
executed by scholar (Srinivas and Babu, 2017). Qualitative research is generally used for
collecting the facts related to the topic. Quantitative research involves gathering of numerical
data related to the topic. In present study, considering the nature of subject matter, researcher has
conducted qualitative research. Investigator has chosen to conduct qualitative research as it
assists in collecting the detail information related to the topic of investigation.
Research philosophy: It is basically a view of different people about the various techniques
which can be utilized for accumulation, analysis and interpretation of information. Research
philosophy assist researcher in identifying the methods which can be used for conducting the

study in systematic manner. The two most popular Research philosophy are positivism as well as
interpretivism. Investigator in present study has used interpretivism research philosophy in
present research. interpretivism research philosophy is most appropriate for conducting study on
specific topic as it allows researcher to utilize theories in effective manner for developing the
understanding about the benefits as well as risk of outsourcing and offshoring in context of
globalization.
Research design : It is basically a strategy used by the investigator during the investigation for
integrating the different components of the study. The most commonly used research design are
exploratory, experimental, descriptive and explanatory (Walsham, 2018). Scholar has chosen
descriptive research design for the present study. The reason for choosing the descriptive
research is that it enables investigator to gain depth knowledge about the study.
Research approach: It is a plan which is based on the assumptions related to the different tasks
that will be performed during the investigation procedure. Choice of the research approach is
completely based on the nature of problem identified during the research. Inductive and
deductive are two most commonly used research approach (Clarke, 2018). In context of present
investigation procedure, considering the nature of the problem found during the investigation,
researcher has used inductive research approach. Reason for selecting the inductive research
approach is that it provides investigator an ease in finding the answer to questions. It also assists
scholar in finding an appropriate solution to the specific issue.
Sampling : this research activity involves using the specific technique selecting the few people
from wide population as a participant in the research. Sampling activity has been conducted by
the participants considering the limitation of resources and time (Flick, 2018). The few sampling
techniques are random sampling , cluster, stratified, systematic etc. In context of the present
study, researcher has selected 20 people that is manager working in marks and Spencer as
participants in the research. Investigator has selected manager purposely, as scholar perceives
that they are people who have power to make important business decisions and they are
stakeholders those who can provide detailed information about the benefits as well as risk
associated with offshoring and outsourcing.
Data collection : It is considered to be as crucial task in research. Primary and secondary are the
two sources from where the information related to the topic can be gathered. Investigator has
used both the sources for accumulating the facts related to the subject matter. Selecting to gather

data related to the topic from both the sources is considered to be as the best decisions as it helps
researcher in gathering huge amount of information (Quinlan, Babin, Carr and Griffin, 2019).
Researcher will use questionnaire technique for collecting the facts related to the topic. This
specific technique has been chosen in order to provide participants an ease in giving the answers.
Questionnaire technique is less costly as compare to other methods. In addition to this, scholar
has used the books, magazines, online articles etc. for gathering the information related to the
topic.
Data analysis: This research activity is mainly concerned with refining of the information in
order to make its useful and understandable by user. Data analysis assist scholar in reaching to
the conclusion and assists them in making suitable decisions (Bell, Bryman and Harley, 2018).
Thematic analysis is the most commonly and popular techniques which are used by researcher
for analyzing the fact . In context of present study, investigator has design the different themes
based on the questions and answers provided by participants. In addition to this, scholar have
used graph and charts for presenting the information in professional manner.
Data analysis and interpretation
Theme 1 : International outsourcing is the strategy presently utilized by marks and
Spencer for marking global presence.
Ques 1. Which strategy is presently utilized by marks and Spencer
for marking international presence?
Frequency
 International Outsourcing 10
 Offshoring 6
 Both 4

Interpretation: It has been analysed from the information present in the table that out of 20
people, 10 have stated that international outsourcing strategy has been presently adopted by
marks and Spencer for marking international presence. These people have given this answer as
they were involved in the development of strategy. There are 6 participants out of twenty those
who have stated that offshoring is the strategy that has been implemented by organisation. They
have provided such response because these people does not have much knowledge about the
business strategy of firm.
Theme 2: yes, Marks and Spencer offshore or outsource business activities
Ques 2 . Does Marks and Spencer offshore or outsource business
activities ?
Frequency
International Outsourcing Offshoring Both
0
1
2
3
4
5
6
7
8
9
10
Frequency

 Yes 15
 No 3
 Don't know 2
Interpretation : From above diagram, it has been interpreted that out of 20, 15 participants has
answered that yes an organisation has outsourced as well as offshore some non-core activities.
Three out twenty people have stated that no marks and Spencer does not offshore or outsource
their business activities. Only two people denied giving the answer s they are not aware about
the concept of offshoring and outsourcing.
Theme 3 : IT business functions are outsourced or offshore by marks and Spencer .
Ques 3. Which business functions are outsourced or offshore by
marks and Spencer?
Frequency
Yes No Don't know
0
2
4
6
8
10
12
14
16
Frequency

 Human resource 6
 Marketing 5
Software development 9
Interpretation : It has been analysed from the information present in the table that 9 out of 20
respondents have stated that software development is the activity which is outsourced by marks
and Spencer. There are six people those who have replied that human resource activity is
outsourced by marks and Spencer. They have given such response based on the improvement or
change ion recruitment practices.
Theme 4: Costs saving, is the main benefit of offshoring and international outsourcing of
business functions.
Human resource Marketing IT
0
1
2
3
4
5
6
7
8
9
Frequency

Ques 4. What is the main benefit of offshoring and international
outsourcing of business functions ?
Frequency
 Cost saving 12
 Access to skilled workforce 2
 Increase in efficiency 6
Interpretation : From the above diagram , it has been interpreted that twelve out of twenty people
perceives that costs saving is the benefit of offshoring as well as international outsourcing. They
have given such answer because they perceive that company have to pay low wages to workers
belonging to other nation in order to get work done. There are six people who has answered that
increasing in the working efficiency is the major benefit of outpouring and offshoring. Those
people have given such reply as they think that by outsourcing the activity management can
concentrate on core task.
Cost saving
Access to skilled workforce
Increase in efficiency
0
2
4
6
8
10
12
Frequency

Theme 5: Loss of control, is the biggest risk associated with international outsourcing.
Ques 5. Which is the biggest risk associated with international
outsourcing ?
Frequency
 Loss of control 13
 Loss of reputation 5
 Loss of innovation 2
Interpretation : It has been analysed from the information present in the table that 13 out of 20
people perceives that Loss of control is the biggest risk associated with outsourcing of business
functions. There are 5 participants out of twenty who have stated that loss of reputation is the
Loss of control Loss of reputation Loss of innovation
0
2
4
6
8
10
12
14
Frequency

major risk associated with off sourcing and outsourcing. As they think that due to negligence by
third party to follow the law can have negative effect on reputation of firm.
Theme 6: Security breach the biggest risk associated with offshoring.
Ques 6. Which is the biggest risk associated with offshoring? Frequency
 High transaction cost 3
 Delay in delivery of product due to long supply chain 5
 Security breach 12
Interpretation : It has been interpreted from the data present in above table that out of twenty 12
people think that security breach is the major threat associated with offshoring. Participants have
given such answer as they have stated that in order to offshore or outsource business activity an
organisation have to share all the information with third party. If tin case the third party fails to
maintain the confidentiality of information that it can have negative effect on business
performance.
Theme 7. marks and Spencer gain advantages besides profit by offshoring .
High transaction cost
Delay in delivery of product due to long supply chain
Security breach
0
2
4
6
8
10
12
Frequency

Ques 7. Can marks and Spencer gain advantages besides profit by
offshoring
Frequency
 Yes 10
 No 5
 Don't know 5
Interpretation : It has been analyzed from the information present in the above table that out of
20 there are 10 people those who perceives that marks and Spencer gain advantages besides
profit by offshoring
Theme 8. extend you are agreed with the statement that offshoring has significant effect on the
business performance of your company .
Up to what extend you are agreed with the statement that
offshoring has significant effect on the business performance of
Frequency
Yes No Don't know
0
1
2
3
4
5
6
7
8
9
10
Frequency

your company ?
 Completely agree 10
 Partially agree 5
 Completely agree 5
Interpretation : From the above diagram , it has been analyzed that there are 10 people out of 20
those who have shown complete agreement with the statement that offshoring has significant
effect on the business performance of your company
Theme 9. main issue faced by marks and Spencer in context of outsourcing.
Ques 9. What is the main issue faced by marks and Spencer in
context of outsourcing?
Frequency
 Slower Turnaround time 5
 Language and cultural barriers. 10
Completely agree Partially agree Completely agree
0
1
2
3
4
5
6
7
8
9
10
Frequency

 Time of zone difference 5
Interpretation : It has been analyzed from the above information that out of 20, the marks and
Spencer company is facing the main issues in context of outsourcing that is language nad
cultural barriers.
Theme 10: Offshoring , is the best way to mark global presence?
Ques 10. Which is the best way to improve business performance ? Frequency
 Outsourcing 5
 Offshoring 10
 Strategic alliance 5
Slower Turnaround time
Language and cultural barriers.
Time of zone difference
0
1
2
3
4
5
6
7
8
9
10
Frequency

Interpretation : From the above diagram, It has been analyzed that there are 10 participants out of
20, those who have suggested marks and Spencer to adopt offshoring to mark global presence.
As they perceive that Offshoring will help an organization in increasing working efficiency.
Theme 11. marks and Spencer can manages an offshore team development .
Ques 11. How marks and Spencer can manages an offshore team
development ?
Frequency
 Making utilisation of video conferencing for communication 5
 Sharing product vision 5
 Simplifying the communication procedure 10
Outsourcing Offshoring Strategic alliance
0
1
2
3
4
5
6
7
8
9
10
Frequency

Interpretation : From the above diagram it has been analyzed that there are 10 people those
who can perceive that by simplifying procedure management in marks and Spencer can easily
manage an offshore team development.
Ques 12. the best strategy that can be adopted by marks and Spencer for improving the
information in international market?
Ques 12. According to you which is the best strategy that can be
adopted by marks and Spencer for improving the performance in
international market?
Frequency
 Joint venture 5
 Merger 10
 Strategic alliance 5
0
2
4
6
8
10
Frequency

Interpretation : It has been analyzed from the above information present in the table that out of
20, there are 10 people those who perceives that merger is the beat strategy which can be
adopted by marks and Spencer for improving business performance in international market.
Research outcomes
It has been found from the study that offshoring and outsourcing business activities
involves high risk, but at the same time it provides certain advantages as well. Other thing which
has been concluded from the above is that loss of control is the major threat associated with
offshoring as well as outsourcing of business activity. Cost saving and financial saving is the
benefit of offshoring and outsourcing.
Reflection and recommendations for alternative research methodology
I have gained lot of knowledge about offshoring and outsourcing by participating in
research. By involving in investigation I have gained practical experience which I perceive that
will help me in conducted the further researches on different topics. I came to know about the
various research techniques that can be applied for achieving the objectives. I have developed
Joint venture Merger Strategic alliance
0
1
2
3
4
5
6
7
8
9
10
Frequency

various skills such as analytical and research ability which I perceive that will assist me in
continuing my career in particular field.
Alternative research methodology
Research type : both qualitative and quantitative research can be conducted in order to collect the
detail information related to the topic.
Research design: Explanatory research design is the another best alternative which can be used
for conducting investigation .
Research approach : Scholar can use deductive research approach in present study.
Research philosophy: Positivism research philosophy could be utilized by the scholar for
conducting the research on specific topic.
Sampling: Random technique can be utilized by scholar in present investigation process as it
would help in eliminating biases.
Data collection : Researcher in present study can use observation method for collection of
information related to the topic.
Data analysis: Spss technique can be used for analyzing the information.

REFERENCES
Books and Journals:
Pla-Barber, J., Linares, E. and Ghauri, P.N., 2018. The choice of offshoring operation mode: A
behavioural perspective. Journal of Business Research.
Haleem, F., Farooq, S., and Boer, H., 2018. Offshoring experience and performance: the role of
realized drivers and risk management. Supply Chain Management: An International
Journal, 23(6), pp.531-544.
Kaur, H., Singh, S.P. and Majumdar, A., 2018. Modelling joint outsourcing and offshoring
decisions. International Journal of Production Research, pp.1-32.
Calvelli, A. and Cannavale, C., 2019. Outsourcing and Reshoring. In Internationalizing Firms
(pp. 111-128). Palgrave Macmillan, Cham.
Ishizaka, A. and López, C., 2018. Cost-benefit AHPSort for performance analysis of offshore
providers. International Journal of Production Research, pp.1-17.
Hansen, C., Mena, C. and Aktas, E., 2018. The role of political risk in service offshoring entry
mode decisions. International Journal of Production Research, pp.1-17.
Rosenbusch, N.,Fink, M. and Meyer, K.E., 2019. Innovation Offshoring, Institutional Context
and Innovation Performance: A Meta‐Analysis. Journal of management studies, 56(1),
pp.203-233.
Chang, P. and Phan, T.T.N., 2018, April. Optimal manufacturing outsourcing decision based on
the degree of manufacturing process standardization. In 2018 5th International Conference
on Industrial Engineering and Applications (ICIEA) (pp. 49-53). IEEE.
Williams, C. and Durst, S., 2018. Exploring the transition phase in offshore outsourcing:
Decision making amidst knowledge at risk. Journal of Business Research.
Nath, A.K., 2018. Determining the Factors and Their Relative Effect on Offshored Data Privacy:
Client and Vendor Perspectives. JABM JOURNAL of ACCOUNTING-BUSINESS &
MANAGEMENT, 24(2), pp.70-83.
Gazley, A. and Simmonds, H., 2018. When service providers fail: outsourcing help and
consumer attitudes. Journal of Business Strategy, 39(5), pp.22-30.

Srinivas, M. and Babu, B.S., 2017. A critical review on recent research methodologies in
additive manufacturing. Materials Today: Proceedings, 4(8), pp.9049-9059.
Walsham, G., 2018. Research methodologies for information systems in the development
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Clarke, S., 2018. Researching beneath the surface: Psycho-social research methods in practice.
Routledge.
Flick, U., 2018. An introduction to qualitative research. Sage Publications Limited
Quinlan, C., Babin, B., Carr, J. and Griffin, M., 2019. Business research methods. South Western
Cengage.
Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university press.
Choi, J.J., Ju, M., Kotabe, M., Trigeorgis, L. and Zhang, X.T., 2018. Flexibility as firm value
driver: Evidence from offshore outsourcing. Global Strategy Journal, 8(2), pp.351-376.
Adams, K., Nyuur, R., Chima, M. and Debrah, Y., 2018, April. Offshore/nearshore outsourcing
as a strategic competitive posturing: insights from Ghana. In 2018 British Academy of
Management Conference.
Munjal, S., Requejo, I. and Kundu, S.K., 2018. Offshore outsourcing and firm performance:
Moderating effects of size, growth and slack resources. Journal of Business Research.
Carmel, E., 2018. The Globalization of Software Outsourcing to Dozens of Nations: A
Preliminary Analysis of the Emergence of 3 rd and 4 th Tier Software Exporting Nations.
The Digital Challenge: Information Technology in the Development Context, Ashgate.
Lioliou, E. and Willcocks, L.P., 2019. Exploring Outsourcing, Governance, and Discourse. In
Global Outsourcing Discourse (pp. 1-19). Palgrave Macmillan, Cham.
Kaur, H., Singh, S.P. and Majumdar, A., 2018. Modelling joint outsourcing and offshoring
decisions. International Journal of Production Research, pp.1-32.
Pla-Barber, J., Linares, E. and Ghauri, P.N., 2018. The choice of offshoring operation mode: A
behavioural perspective. Journal of Business Research.
2

Caratti, S., Pinto, D., Scully, G. and Perrin, B., 2018. An analysis of the Tax Practitioners Board
outsourcing exposure draft. Tax Specialist, 21(3), p.106.
Fountain, J. and Langar, S., 2018. Building Information Modeling (BIM) outsourcing among
general contractors. Automation in Construction, 95, pp.107-117.
Koch, C. and Jørgensen, C., 2018. Not Yet Modern? Longitudinal Organizing Capabilities of
Offshoring Enterprises. In Positive and Negative Aspects of Outsourcing. InTech.
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ONLINE:
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3

Appendix
Questionnaire
Name :
Department:
Ques 1. Which strategy is presently utilized by marks and Spencer for marking international
presence?
 International Outsourcing
 Offshoring
 Both
Ques 2 . Does Marks and Spencer offshore or outsource business activities ?
 Yes
 No
 Dont't know
Ques 3. Which business functions are outsourced or offshore by marks and Spencer ?
 Human resource
 Marketing
 Manufacturing
Ques 4. What is the main benefit of offshoring and international outsourcing of business
functions ?
 Cost saving
 Access to skilled workforce
 Increase in efficiency
Ques 5. Which is the biggest risk associated with international outsourcing ?
 Loss of control
 Loss of reputation
 Loss of innovation
Ques 6. Which is the biggest risk associated with offshoring?
 High transaction cost
 Delay in delivery of product due to long supply chain
 Security breach
4

Ques 7. Can marks and Spencer gain advantages besides profit by offshoring
 Yes
 No
 Don't know
Ques 8. Up to what extend you are agreed with the statement that offshoring has significant
effect on the business performance of your company ?
 Completely agree
 Partially agree
 Completely agree
Ques 9. What is the main issue faced by marks and Spencer in context of outsourcing?
 Slower Turnaround time
 Language and cultural barriers.
 Time of zone difference
Ques 11. How marks and Spencer can manages an offshore team development ?
 Making utilisation of video conferencing for communication
 Sharing product vision
 Simplifying the communication procedure
Ques 12. According to you which is the best strategy that can be adopted by marks and
Spencer for improving the information in international market?
 Joint venture
 Merger
 Strategic alliance
5